Again: suppose, as is often the case, the rate of freight from Chicago to New York via Jersey City is 15 cents per hundred pounds, shipped by railroad through seven States, must every interior non-competing point have the same? Has Chicago, that has water communication all the way to New York, no advantage over the non-competing interior places? Can not a railroad company be allowed to make a low rate that will enable it to compete with the water route without being cɔmpelled to do the same for every other point that has no water advantages, and whose business compares with Chicago as a bucket of water to the great ocean?

Shall a railroad running from Chicago, obliged to compete at that point with several other roads, all anxious for business, be tied down at all its non-competing stations to accept rates forced frequently by ruinous competition? Why should Kansas City, Omaha, Minneapolis, Cincinnati, Indianapolis, Saint Louis, great Western cities of trade and transportation, favored by nature in location, and, like Chicago, covered with a network of railroads reaching out in every direction, be placed on an equal footing with intermediate stations?

Some may claim that local points east of Chicago are entitled to same rates to local stations west of great Eastern cities like Baltimore, Philadelphia, New York, and Boston as are allowed between Chicago and the Eastern cities just named. There is no denying it does look so to the superficial observer. But let us examine the question. Chances are an empty car must have been hauled to the western point and that it must after discharging be hauled to the eastern terminal. Railroad experts say there is more work in this than through hauling. Facilities for loading and unloading at the interior points rarely equal the extreme stations. Neither the shipping nor discharging point has any competition, and probably the road is getting no more than fair compensation which may be necessary to in a measure regain what it has lost by the competition of water and other roads. This brings forward the question why the country should apparently be at a disadvantage over the city terminal point. The reply is, it has always been so, and is due to necessity and not always to justice.

Now, let us look at another view of the case-the standpoint of a manufacturing concern-the difference between two companies in the same business, one located in a large city, the other in a country town; one pays perhaps $250 per front foot for land whereon to erect its buildings, the other pays $250 per acre; one pays enormous city taxes, the other very little; high city rents and prices for provisions force one to pay its employés much more than the other; both of these concerns sell their product perhaps in the same sections; the city goods must go by rail directly through the town occupied by the other. The question arises, how is the city company to compete? How can it be done except by the railroad company charging more for the short than for the long haul, and thus enabling both to lay down their goods at a given distance at precisely the same cost? Locate New York as the city and 50 miles in the interior of New Jersey as the country, with Virginia and other Southern States as their market. The Pennsylvania road must give the New York dealer lower rates or he must close up his business. Unless the Pennsylvania road does charge the New York manufacturer less than the Jerseyman, then it certainly discriminates in favor of New Jersey.

Mr. REAGAN. May I ask the gentleman a question?
Mr. DUNHAM. Certainly.

Mr. REAGAN. Is it your conception that it is any part of the business of the railroads to equalize the profits of private parties by decreasing the profits of one and enlarging those of another?

Mr. DUNHAM. I will say in response that it may not be a part of the business of the railroads. I am willing to concede that it is not; but it is a necessity at times to communities; and I understand, and in fact it is claimed, that the railroads are run for the benefit of the people. If it is necessary for the benefit of a community to place that community, in reference to freight rates, at any time equal to another community, then the railroad company may do so by making a concession to one so as to enable it to compete with the other.

Mr. REAGAN. Does my friend think that a State government or the United States Government would dare to do such a thing as that? Mr. DUNHAM. I do not know that they would. I do not think it is the business of States; but it is probably the business of railroads, for two objects; one to make money for their stockholders, the other for the people.

Mr. O'NEILL, of Pennsylvania. Does not my colleague from Illinois understand that the railroads in that part of the country represented by the chairman of the Committee on Commerce, generally have been failures? They pay neither interest on their bonds nor dividends on their stock; and he speaks from the standpoint of broken-down railroads.

Mr. REAGAN. No; I do not speak from that standpoint. I will take any road; take the Pennsylvania road, for example, if you call that a broken-down road.

Mr. O'NEILL, of Pennsylvania. No, sir, I do not; but I speak of the general experience of the gentleman from Texas in reference to railroads.

Mr. REAGAN. The gentleman misapprehends the position I take. Mr. DUNHAM. And not only is it for the benefit of the railroads to make these concessions to the towns or to manufacturing concerns, but it is for the benefit of the people, and the railroads and the people belong together, their interests harmonize. If the people crush out the railroads they crush out themselves. If the people by a series of obnoxious measures of legislation or of injurious legislation compel the railroads to do business at a rate that is ruinous to them they might as well close out their own business, because a railroad company is like a mercantile establishment; if it constantly loses money it goes to the wall. If a railroad company constantly loses money they go into the hands of a receiver, wiping out the stock; in fact they fail. Now, it is for the interest of the railroads to help the towns through which they run; and if the city of New York needs a rate lower to Virginia, North Carolina, or Texas, owing to the increased cost of manufacturing business in that city over a town 50 or 100 miles in the interior, it certainly is for the benefit of the people of New York that they should have that rate, and it is no injury to the town 50 or 100 miles away, especially as they both sell their manufactured goods 500 miles off at the same price.

The Reagan bill prohibits what is proper and legitimate in such a case as this, and yet it inconsistently says, "all charges for such services shall be reasonable."

Now, we will turn in another direction. Millions of bushels of grain arrive at the port of Buffalo each year via the lakes from the West. There are several ways of getting this graf to New York-one all wa

ter, one all rail; other, part rail and part water.

The New York Cen tral road is wholly within the State of New York. If it carries any of this grain it must compete with the Erie Canal which last year carried millions of bushels of grain at under 5 cents per bushel. It can do this, has done it in the past, will do it in the future; and yet from Buffalo to interior points it charged and collected a higher rate than 5 cents and also a higher rate from interior points to New York.

Can the Erie, West Shore, and other roads that reach New York by going through another State compete, under this Reagan bill, with the New York Central? You may say they can, but if they take grain for one person from Buffalo to New York, then they must do it from Buffalo to all points and from all points to New York at the same rate. In other words, severe United States law forces several roads toward bankruptcy, while another with no better facilities bears off the palm, collects the profits, and does all the business. How much better would it be to have a railroad board of commissioners that could adjudicate promptly upon such cases and place such parallel roads on equal terms. Here is a discrimination, or rather here is proposed to be a discrimination, in favor of the New York Central Railroad upheld and supported by law.

The scales of justice will never balance under such weights as this. Under this short-haul prohibition section railroads that now make through rates up and down the Atlantic coast from Maine to Texas must retire from the business, for they surely can not afford to do local work at prices they must concede in order to compete with the ocean steamers. Must the lines of railroad that take cotton and sugar from New Orleans or other Southern and Western cities to Pittsburgh, thence on to Philadelphia and New England, making rates that compete with the Mississippi and Ohio Rivers, be compelled to do all their local business at the same rate? Shall the great Southern ports, like New Orleans, Mobile, and Galveston, blessed by nature with extra means of communication, have no advantages over interior towns?

I say to you your theory of anti-short haul is wrong; that your idea is nothing but a theory; it is based purely on an imaginary grievance. Enforce this principle and the immense through business from extreme Western points to Eastern cities will surely cease. More than half the time through contracts are made at bare cost and frequently for much less. The roads can not afford to and will not do the local traffic at prices forced by ruinous competition.

Pass this bill and the Western roads can only haul their freight to the lake and river cities during the season of navigation. When icebound winter settles upon the water ways the West must keep its products, and the East failing to accumulate in the fall must go without. Adopt such a measure as this and you turn back the car of progress twenty-five years.

Argue, if you please, that local points between Chicago and Saint Louis and the seaboard are entitled to the same rates or even the same proportionate rates-you must concede that the great country west of the lakes and Mississippi River is the gainer by the low rates made by railroads to the Atlantic coast. Between Chicago and the seaboard lie great commonwealths, great cities that enable the agriculturist to obtain prices that approach at least fair remuneration for their labors. Through rates by railroads teud to bring remote sections of one common country on to a par with others. What matters it to the consumer of breadstuffs in New York whether they come from Ohio or Iowa, Da

kota, and Nebraska? What matters it to him whether one shipping point pays more or less than another? It so happens that the great consuming part of this country is east of the Alleghanies. What they want is cheap food, and they have no more partiality for Ohio than for Nebraska.

What the great producing States and people want is cheap freights and rapid transit, and any interference by legislation that will eventually become a stumbling-block on their road to wealth will not be allowed to stand. The great law of competition briefly mentioned in the first part of my remarks has so far worked wonders in favor of both sections and drawn each, financially, commercially, and agriculturally, much nearer together; and more than likely they are both better off to-day than they would have been had the Reagan proposition been law many years ago.

Now, having considered the short haul subject, let us look a little at another one of the prohibitions of this Reagan scheme. I refer to rebates or drawbacks, and while it would be well to prohibit in certain cases, I think it would not be in all. For the same kind of service and from and to same points rebates should not be given to one shipper over another. For instance, through shipments from West to East or East to West should be equal; no advantage should be given to the exclusive gain or benefit of one shipper and some other one left out in the cold. Suppose it could be demonstrated to a board of commissioners, if such were established, that in certain cases rebates should be allowed, might it not also be proven that the allowance was just, proper, and for general benefit? The Reagan bill says positively it shall not be done. No matter how plain figures may demonstrate its fairness, an iron-clad law stands, like a solid wall, face up against honest competition.

We all know the differences that have existed among the great trunk lines as to rates from the West to Philadelphia, New York, and Bostondifferential rates. New York and Philadelphia terminal roads have long practically quarreled upon this subject. One demanded a concession, the other refused; result, cuts, private running of each other, unsettling of prices, uncertainty, doubt in commercial circles. Suppose, now, the rate on grain from Chicago to New York be 25 cents per hundred pounds, and to Boston 30 cents. Both are seaboard points; both have ocean connections to Europe, and universally the rates by water are the same. Under this difference of 5 cents in favor of New York will the Chicago shipper send anything via Boston? You may say the ocean carrier must get less from Boston than from New York. When he is carrying grain from New York to Liverpool for rates from 2 cents per bushel down to ballast, how much less must he accept from Boston?

That argument must drop from its own weight. Why should the Boston rate be 5 cents over the New York rate? First, because New York and Philadelphia terminal roads demand it. Second, because Boston roads claim it from the additional distance. Third, because less competition enables them to obtain it. Fourth, because materially less business warrants it. Now, how is the Boston exporter to compete with New York? Simply by the railroad company saying to the exporter, "If you put this grain on board a vessel and ship it to Europe we will rebate you 5 cents per 100 pounds on your rail freight." Who has lost anything by this rebate? Who would lose if this rebate was not made? First, the Boston railroad would not have the business at all; second, the workman who handled the property in Boston would look else

where for his labor; third, Boston as a terminal point would suffer be cause of advantage given to another. Who would gain in this transaction? New York railroads would get all the haul, New York laborers get the handling, and New York elevators the transfer charges.

In this case what harm is a rebate? Why is it not a positive benefit to Boston? The Reagan bill will not allow this. A railroad commission would, and justly so, too. Give authority to a board to study the whole situation, ascertain all the facts, their bearing on the interests of different cities, needs of the nation in general, natural laws of trade and commerce, facilities requisite to successfully compete in a lawful way with others, and they can readily decide what is fair between all. In such a case as I have instanced a denial of rebates places one great city at a disadvantage compared with another and restricts men to certain routes. It would in fact be a discrimination. The Reagan bill is so straight in such a matter as this as to fall over backward. The phrase is old and homely, but goes to the root of the situation, shows its iron-clad rule and the usual result of overdoing.

The Reagan bill allows no rebates whatever the commission might allow them, but not to one man more than to another. In so far as either bill prohibits special privileges to any one shipper more than to all, it meets an universal demand for proper legislation that shall prevent what is usually called unjust discrimination.

I might continue this subject and present other cases justifying rebates-giving additional emphasis to my position-but their general nature would be the same. I believe it can be asserted without fear of successful contradiction that rebates on freights are at times necessary to bring business-that by them no harm is done; further failure to allow them would work injury in some quarters. The more we export of our products the better is our financial condition. No one ought to complain if our railroads encourage shippers by giving them facilities such as they need. Other countries are now so strongly competing with us that it requires the closest possible figuring to place our goods in the markets of the purchasing nations.

Right here may be given a business transaction only a few weeks old, perhaps bearing more on the "long and short haul" question than on 64 rebates.

A New York exporter presented to certain railroad freight agents the price at which he could sell a certain quantity of wheat in London-the expenses of shipment aside from freight-the cost of the wheat on board the cars in Chicago, and allowing for himself the smallest kind of commission, and proving that the business could be done by their giving him an extremely low rate of freight from Chicago to New York.

The rate asked was less than 8 cents per bushel, while all-water rates at that date were fully 9 cents. The terms of the London offer required the grain delivered in London at such an early date that the shipper could not, no matter at what rate of freight, avail himself of the allwater route from Chicago. Time was the essence of this contract. The railroads, anxious to do business and get something for their cars rather than have them stand idle, accepted the terms and hauled the grain. Any one with the slightest business knowledge can readily see that if compelled to carry out the "short-haul" prohibition of the Reagan bill they never would have taken this contract. America never could have shipped this wheat. Chances are India would have once more reaped an advantage. Who for one moment would claim as a business or financial principle that roads can afford to carry grain 1,000 miles for